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New York Faces New Wine Sales Restrictions

Wine lovers may be stuck with higher prices or a smaller selection if the New York legislature passes a controversial measure that would require all New York wholesalers to store their wine within the state.

Two little words are once again at issue in the Empire State: “At rest.” Legislation, introduced in February by state Sen. Jeffrey Klein, would require all alcoholic beverages sold by New York wholesalers to remain “at rest” in a warehouse in New York for at least 24 hours prior to delivery to a retailer or restaurant. The stated goal of the bill, SB3849, is to create new jobs in New York and “level the current playing field” for the state’s wine and spirits wholesalers.

About 150 of New York’s approximately 200 wine wholesalers currently use storage space in New Jersey for their inventory, with most of those 150 based in or around New York City. SB3849 would require those wholesalers to obtain suitable secure, temperature-controlled warehousing in the New York City area, to replace the 800,000 to 1 million square feet of space they currently lease in New Jersey. The bill’s opponents claim this amount of unoccupied storage simply does not exist.

The New York Alliance of Fine Wine Wholesalers says its smaller members can’t afford to build new temperature-controlled warehouses in New York—which would take years. Those wholesalers who could afford the little available high-rent storage space in New York would offset the costs by raising wine prices. If passed, the at-rest requirement would take effect Jan. 1, 2014.

“It’s basically saying, if you’re currently in New Jersey, you’re out of business,” said Constance Oehmler, CFO of Verity Wine Partners and secretary for the New York Alliance of Fine Wine Wholesalers. “Making a law for imaginary jobs that you hope will happen when you know there is a true job cost is not a good idea.”

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